‘With budgets tight, Starmer is right to crackdown on quangos’

Today, the Prime Minister will make announcements to radically overhaul the State: chief among them a crackdown on quangos, the bodies now responsible for 60% of day-to-day spending, which operate at arm’s-length from ministers.

By bringing delivery closer to ministers, Starmer is aiming to take on the “cottage industry of checkers and blockers” slowing things down, but also to slash waste on contracts and cut regulation costs for business to boost growth and put money into people’s pockets.

It’s a rapid about-turn since last year, when the government, following in the footsteps of previous administrations, committed to creating new public bodies – like a National Wealth Fund and GB Railways – to help deliver its priorities.

We should applaud what is a bold step in the right direction. Despite the fact that public bodies now spend over £350 million a year, government currently has very little idea whether many of these bodies are effectively delivering against their aims.

With budgets as tight as they are and tough spending decisions being made, whether on foreign aid or the winter fuel allowance, failure to take quango performance seriously does an enormous disservice to the public they are supposed to serve.

Reform think tank FOIs revealed that only around 250 civil servants in Whitehall are employed in sponsorship teams, which act as the ‘golden thread’ between ministers and public bodies, and interviews with Whitehall insiders confirmed that many of them are very junior and lacking the skills to provide effective oversight. Public bodies, in contrast, employ almost 400,000 people.

‘The public expect a State which is accountable and responsive to their needs’

Understanding whether a healthcare regulator or an inspectorate of prisons is working well, even with the right ‘sponsorship’ skills, is an unenviable task. Underpowered it’s impossible, with senior officials telling us that many sponsorship teams “don’t even try”. We don’t even have a definitive list of how many public bodies exist, even as we’re creating new ones, and many public bodies have gone years without a full board of directors in place.

Reviews of public bodies, which are designed to provide independent insight into their performance, are often completed by staff from the very departments that oversee those public bodies – requiring them to directly comment on the performance of organisations they are responsible for – leading, unsurprisingly, to egregious conflicts of interest. One official told us that a department had even threatened them in the run-up to an independent review: saying they’d previously used reviews to “shut down bodies like yours”.

It’s perhaps no surprise, then, that when public bodies fail, they often fail catastrophically. Take the Care Quality Commission, which was found last year to not have the expertise needed to assess the safety of health services – in other words, to do its job. Or the mismanagement of HS2 Ltd by the Department for Transport, which Parliament concluded has cost the taxpayer billions of pounds in overspend. Or the many scandals in the health service that were not spotted by NHS England.

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Worse, insiders told us there is a “genuine lack of curiosity” among senior officials as to how most public bodies are run, and that Whitehall should be “pretty ashamed of itself” for failing to prioritise and properly resource oversight. As Whitehall has loosened its grip, public bodies have also developed more complex, less accountable cultures. Insiders explained that many now believe they “can do whatever they want” – and confuse their independence with unaccountability. No wonder so many ministers feel they pull levers and nothing happens – and why the PM is committed to bringing decision-making back under ministerial control.

The public rightly expect a State which is accountable and responsive to their needs. And achieving the Government’s missions will require the whole of the public sector to pull together and deliver as one.

Yet, without a much clearer relationship between the decision-making outsourced to public bodies and the authority still held by ministers, we risk these quangos being more of a hindrance than a help. Realising the ambition of a “more agile and active State” means rejecting the idea that arm’s-length is the politically savvy option.

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